House Bill Would Alter College Cost Provisions

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When the full House of Representatives begins its consideration Thursday of legislation to renew the Higher Education Act, much of the focus will still be on the price of college. But the bill that lawmakers will be discussing, a draft of which began circulating over the weekend, takes a more tailored approach to the scrutiny it will impose on colleges that raise their tuition significantly.

As passed by the House Education and Labor Committee in November, the Higher Ed Act legislation would have created “Higher Education Price Increase Watch Lists” of institutions in various sectors that increased their tuitions above the average for their peers, and required each institution on the lists to create a “quality efficiency task force” that must analyze the ways in which the institution was operating “more expensively [than its peers] to produce a similar result” and figure out how to cut its costs, and make the results public.

A revamped version of the legislation that the House panel's Democratic and Republican leaders have drafted for consideration by their House peers this week -- besides abandoning the "watch list" phrase -- would require the creation of such committees only by the 5 percent of institutions in each sector (public, private, for-profit, two-year, four-year, etc.) that raise their tuitions by the highest percentage over a three-year period. Institutions on the list would also be required to report to the education secretary on the factors contributing to the price increases. (An institution would be exempt from these requirements if its total tuition and fees are in the lowest quartile of its sector or if the amount of the three-year increase is less than $500.)

The legislation would also create lists (with no apparent ramifications) of the 5 percent of colleges and universities in each sector with the highest tuition and fees and of the 5 percent with the lowest tuition and fees (the latter list, presumably, is designed to celebrate rather than embarrass the institutions). The provision would take effect in July 2010.

If If the proposed legislation would ease up in its requirements on institutions that raise their tuitions significantly, it would appear to add to other reporting burdens on all colleges and universities. It would require the creation of a “Higher Education Pricing Summary Page” for each institution on the Education Department's College Navigator Web site, which would include information on each institution's tuition and fees for the next academic year, average net price by income quintile for the three preceding years, and the average percentage and dollar change in tuition and fees for the three preceding years, among other data.

It would also require colleges and universities to report a significant amount of additional consumer information to the department, including a breakdown of graduation rates by income quintile, among other data.

The legislation also retains a controversial provision, opposed strongly by state leaders, designed to withhold federal funds from states that cut their budgets for higher education.

Other parts of the new version of the bill are likely to spill out over the next day or two, and while college lobbyists were still reviewing the new college cost provisions, which were released late Friday, they had mixed first impressions. While they were gratified that House staff members were working to address their concerns about the previous bill's cost requirements, and steps made to soften them, they said the new draft actually increased the reporting requirements over all.

"It's pretty clear that the House Committee wants to impose a significant number of new reporting burdens on colleges and universities and extensive new record-keeping requirements on the Education Department," said one college lobbyist, who asked not to be identified because negotiations are continuing with the House. "Schools will not be compensated for the costs associated with the new mandate and the department will not be given new staff to manage the effort at their end.... Increasing federal mandates on institutions increases the cost of doing business and, unfortunately, those costs are passed on to consumers."

The Higher Ed Act legislation is expected to be on the House floor Thursday.